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Super Contributor
Posts: 5,777
Registered: ‎02-24-2015

Re: Worried about my parent's retirement

Hannahj55 wrote:

I'm happy they paid off their mortgage but when I asked them if they would like to refinance and use their equity as a line of credit for dire emergencies, they flat out said no.


There you have it. They just proved they're way smarter than you about money. So you can officially stop worrying about them now. Your advice was absurd.



I have tried to help my parents with their credit scores because they don't have too much credit AND they are the cash only type people. Both my parents think credit cards are evil


Again they show they're smarter than you


and bonds and stocks are bad.


Once again they show they're smarter than you


Quite frankly, I understand why they would think so but once you learn how to use them, they are absolutely valuable and useful.


You left out 'risky'.


If you don't know how to use them properly, you'll be in sh*t hole for a long time. Anyways, I will continue to convince them until they do something. I wouldn't give up on them.


My advice to you is to start learning from them instead of trying to teach them; they are way wiser than you about money, about borrowing, about stocks, and about bonds.


As for annuities, I was almost positive they can make payments or a lump sum. I could be wrong in this department. 


Annuities are the biggest scam going.


FICO8 EQ 780 TU 762 EX 784 FICO5 EQ 722 Total revolving 410500
Valued Contributor
Posts: 2,087
Registered: ‎01-05-2010

Re: Worried about my parent's retirement

People just aren't good at saving for retirement, which is why the only thing that works is from the start of your work life to deduct from your paycheck a percentage, so you will never get used to more than the rest of it for your everyday life. This is why social security works.


The government is flavored by who's in charge. If you think the government will take care of you in retirement, what does that mean? It's not like the benefit is built into the constitution or your citizenship. And neither is say health insurance.


What good is it to have paid off your house, if an operation comes at twice the cost and your life depends on it? If you know the answer to this, you have a good grasp of personal finance.

Posts: 17,330
Registered: ‎12-30-2011

Re: Worried about my parent's retirement

[ Edited ]

This isn't likely something you can fix Hannah; most if not all parents suck at taking advice from their children when they think they don't need it.  Doesn't end well either in trying in most cases.


Look at it in cold hard terms: if you own your house free and clear, depending on the tax situation their expenses are trivial if they decide to cut back.  That's what reverse mortgages were designed for anyway, depending on the value of their property they will be fine just if you're worried about inheritance that likely won't be a thing in that scenario.


There will be some sort of medical insurance still, there may be some sort of public retirement benefits, even with my sloppy and F'n stupid SSA record, I'm still looking at more than my current expenses if I stay gainfully employed at the last salary they have (which was a partial year one), by a non-trivial amount if I exclude my mortgage payment.  When I'm spending 2.5K per month in food / gas / slush fund I'm living well for my needs but that's me.


The retirement calculators suggesting I need 1.3M in assets to retire are flatly wrong as they assume I'm spending most of my income now and will continue to do so, which is sort of absurd... I may get there anyway as the vast majority of my discretionary income gets shuffled into various investments but it's not mandatory and there will be jobs for me even at 75 if I need them: depending what your parents do, they may well be fine as they are probably ahead of where I am now depending on the value of their home (I still owe 230k on mine).


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Valued Contributor
Posts: 1,970
Registered: ‎01-23-2013

Re: Worried about my parent's retirement

Revelate wrote:

Look at it in cold hard terms: if you own your house free and clear, depending on the tax situation their expenses are trivial if they decide to cut back.  That's what reverse mortgages were designed for anyway, depending on the value of their property they will be fine just if you're worried about inheritance that likely won't be a thing in that scenario.


Whatever else is right or wrong for these parents, I agree that one thing they should surely NOT do is mortgage their house.


While younger people and people geared to investing may view 100% home equity as wasted money and therefore wasted opportunity, when it comes to saving for retirement, home equity is a great thing. With these parents' mindset, too, they're unlikely to blow that one great thing they have going for them. When they can't work any longer, they'll have both that equity and lower monthly expenses.


Unfortunately, they also have a point that interest rates are so low on so many potential savings/retirement vehicles that investments they make now won't even keep pace with inflation.


Yes, they should probably be putting more aside than they are and they probably shouldn't be taking $10k vacations, but with a paid-up house and a lifelong avoidance of debt, they're likely not in that bad a condition.

Frequent Contributor
Posts: 471
Registered: ‎10-05-2012

Re: Worried about my parent's retirement

good points gunnar.


I agree with revelate- OP will not be able to fix this and most do not take advice from their kids well.

Posts: 15
Registered: ‎12-05-2013

Re: Worried about my parent's retirement

You might want to see if they would be willing to call in to Dave Ramsey, or at the very least see what they think of him.  He isn't perfect, but it seems like you parents agree with him on a lot stuff.  Having someone else other than yourself tell them that they need to start saving for retirement may be enough of a push to get them going in the right direction.

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Frequent Contributor
Posts: 389
Registered: ‎07-08-2016

Re: Worried about my parent's retirement

The best way to win your elders over is by example. Instead of telling my parents what they should be doing, I simply did my own thing and occasionally let them know my situation. They observed my nest egg grow while theirs did very little, and now I find them at least asking questions about what to do with money and how to grow it. You can't make them listen; all you can do is show them you know what you're doing (or not).


The other problem in here is you must also be aware that the strategy changes whether you're 40 or 70. I can afford to take bigger risks and ride out a bear market because I don't need the money for another 30 years. They cannot. This gets tricky because it quickly becomes "do as I say, not as I do."

Posts: 7
Registered: ‎10-05-2015

Re: Worried about my parent's retirement

I suspect they're not telling you everything because they do not feel as though it is your business, and the more you ask about their money the less likely they are to tell you about it.    

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